Many prospective home buyers were already unable to justify the price in Steamboat Springs, but rising mortgage payments in the past few months are making it harder for more people to buy in Root County. .
Steamboat Sotheby’s International Realty broker and local real estate statistics expert Doug Labor explains that monthly payments for Steamboat’s most popular affordable properties have nearly doubled. , considered “surprising” and “very concerning” to buyers. .
Mortgage rates have risen about 2% since early 2022, jumping from about 3.5% to 5.5%, as federal officials try to curb inflation in a rapidly rising economy.
At the same time, Steamboat home prices are still rising, albeit not as much as they have in the past two years, Mr. Labor said.
Fluctuations in the market and interest rates are stressing local homebuyers.
Steamboat’s Modesty and Matt Martinez recently couldn’t buy Oak Creek land when their mortgage payments doubled.
“You can’t buy the place because of the interest rate,” said Modesty. “We had to look at different price points to keep up with rising mortgage rates. I was more nervous than I expected.”
One type of home that has risen more than other categories in Steamboat is the bottom 15% price range, which includes townhomes and condos, which has risen about 42% since 2021, said Laver. .
An entry-level condo that had a median price of $299,500 in early 2021 may now be on the market for $425,000. Add in price increases from higher borrowing rates, and his 30-year fixed-mortgage monthly payments for a $382,500 loan with a 10% down payment have fallen from about $1,210 last year to $2,172 this year. Raver explained.
Essentially, a 2% mortgage rate hike through the first six months of 2022 will add $119 a month for every $100,000 in loan payments, Labor said.
The Labor Party example provided earlier this week does not include the Federal Reserve’s decision to raise interest rates by another 0.75% on Wednesday, July 27.
Kendra Thomas, Steamboat’s Land Title Guarantee Co. Team Leader, said: “The resort market has seen a decline in purchase transaction orders over the past month or two.”
Labor agreed that home prices continue to rise gradually due to the scarcity of properties on the market and the limited supply of homes.
“Sales have slowed so far this year as housing supply has declined compared to the first half of last year,” said Laber. “Housing is becoming less marketable because fewer people can afford to buy it.So we don’t get multiple offers like we used to.”
The National Association of Realtors reported last week that existing home sales fell for the fifth month in a row in June, down 14.2% year-over-year in June 2021.
Last month, the median resale home price across all home types nationwide was $416,000, according to the association. This corresponds to a price increase of 13.4% from June 2021.
According to the National Association, prices rose across all US regions, with June marking the 124th consecutive month of year-over-year gains and the longest streak on record.
Realtor Marci Valicenti, co-owner of Colorado Group Realty, said limited inventory has made it very difficult for many local buyers.
“Inventory shortages have become quite severe over the last few years,” says Valicenti. “Rising interest rates have made it impossible for some homeowners to continue to be renters. I have.”
“Cash is still king in most resort markets,” says Land Title’s Thomas. That means first-time buyers and low-income buyers are at a disadvantage when competing for the same property as a cash offer.
She said June 2022 cash transaction percentages by county included 42% in Root County, 43.5% in Eagle County and 44.6% in Grand County.
That said, Labor still advises eager buyers to move forward.
“If a person looking to buy a property today finds a suitable home and it’s a reasonable price for our market, we encourage them to buy. “
Valicenti also now recommends buying a home, suggesting that buyers keep an eye on interest rates and be prepared to refinance within a year or two.
To contact Suzie Romig, call 970-871-4205 or send an email. [email protected].